Rep. Honda says it’s time to “scrap the cap” on Social Security payroll tax

South Bay Rep. Mike Honda Wednesday called on Congress — and his Democratic challenger, Ro Khanna — to protect and expand Social Security benefits for seniors, saying it was time to “scrap the cap” on payroll taxes.

Honda called Wednesday for an end to the payroll cap, which currently mandates that — regardless of what they earn — all Americans pay Social Security taxes only on the first $113,7000 of their income.

“I have yet to hear a good explanation of why that cap should exist,” Honda said, adding that lifting the cap will not only ensure the program’s solvency, and help pay for expanded benefits but also maintain the safety net for seniors, the disabled, and children who rely on the program for financial security.

“The federal government must fulfill its promise to its people, and that starts by asking all Americans to pay their fair share into a system that benefits everyone,” he said.

Khanna, in a statement, said he supported protecting the current level of Social Security benefits for seniors, adding that Congress must also focus on “extending its solvency.”

He advocated “increasing” the payroll tax — but not scrapping it entirely — and said he opposed bumping up the retirement age.

The event by Honda signals an increasingly aggressive effort by the 7-term Congressman, 72, to directly contrast himself with Khanna, 36, a former Obama trade representative who has challenged him in the 17th Congressional District race.

The two Democrats are not far apart on social issues, but the race appears poised to highlight some generational differences regarding tech politics and Silicon Valley, which is the heart of the district.

Honda has the support of labor and much of the Democratic establishment, including President Barack Obama, while Khanna raised more than $1 million in the last quarter with the backing of many of Silicon Valley’s star tech innovators.

Honda appeared Wednesday at the press conference alongside Fremont Mayor Bill Harrison and Newark Mayor Alan Nagy, as well as scores of constituents, outside the Fremont Social Security offices.

The Congressman said he will introduce the Strengthening Social Security Act of 2013, which calls for lifting the payroll tax cap, with Rep. Linda Sanchez (D-Calif.) in the fall.

But Honda also distanced himself from a past statement in which he suggested raising the retirement age for Social Security.

Honda meets supporters in Fremont

Honda told reporters he didn’t recall his statements in 2012 to a Mercury News editorial board, in which he said he supported raising the retirement age “in proportion to life expectancies.”

Reminded the interview was on videotape, Honda said, “We can withhold that for the time being….I don’t think we need to do that right now.”

Scrapping the income tax cap, he said, “will extend Social Security to past 2055. We can hold that off.”

Khanna issued his own statement on the issue of Social Security solvency.

“My parents worked hard, paid into Social Security and, as retirees, rely on those benefits,” Khanna said. “Congress should stop playing politics with Social Security and focus on extending its solvency, so future generations can retire with dignity and security,” said Khanna. “The benefits promised to current recipients must remain sacrosanct.”
He said increasing the payroll tax cap from its current level would require “the wealthiest among us to pay their fair share.”
“This would add many years to the solvency of the Trust Fund without cutting benefits or increasing the retirement age, which I strongly oppose,” Khanna said.

Asked about the CD-17 race, Honda said he was energized and ready for what could be a competitive battle.

“I’m a sitting Congressperson. I’ve got work to do,” he said, adding he was focusing on comprehensive immigration reform, education and a host of other issues of importance to constituents in the district which stretches from Fremont to San Jose.

And Honda said he wasn’t worried about the current fundraising gap in the race.

“I have to raise funds also. We will do that..and it’s going to be a situation where we will have enough funds to tell our story…making sure we reinforce our presence to our residents,” he said.

UPDATE: Khanna’s spokesman, Tyler Law, issued this statement on Thursday: “Ro believes we should take immediate action to protect Social Security for the many seniors in our district and across the nation who depend on it. That means advocating for sensible solutions like increasing the payroll tax on the wealthiest and eliminating the current cap — without making empty promises that could ultimately threaten the system overall.”